M/s M. K. Gupta & Co., Siliguri V. DCIT, CIR-2, SILIGURI, Siliguri

ITA 1316/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1072 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 19-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA CIT REVEN
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA [BEFORE SHRI P.M. JAGTAP, AM AND SHRI S.S. VISWANETHRA RAVI, JM] I.T.A. NO. 1316/KOL/2015 ASSESSMENT YEAR: 2012-13 M/S. M.K. GUPTA & CO...............................APPELLANT METRO HEIGHTS, 2 ND FLOOR, BEHIND NISSAN SHOWROOM 2.5 MILE, SEVOKE ROAD, SILIGURI, WEST BENGAL 734 001 [PAN : AAEFM5024A] D.C.I.T., CIR 2................................................RESPONDENT AAYAKAR BHAWAN, PARIVAHAN NAGAR, MATIGHARA, SILIGURI, DARJEELING - 734010 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI SOUMYAJIT DASGUPTA, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : NOVEMBER 06, 2017 DATE OF PRONOUNCING THE ORDER : NOVEMBER 08, 2017 ORDER PER P.M. JAGTAP, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) SILIGURI DATED 22.09.2015 AND THE GROUNDS RAISED BY THE ASSESSEE THEREIN READ AS UNDER: 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS. 6,27,881/- MADE BY THE A.O. ON ACCOUNT OF PAYMENT MADE TO M/S. TOPLINE BY WRONGLY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) R.W. SECTION 194A OF THE ACT. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 45,886/- MADE BY THE A.O. ON ACCOUNT OF FEES PAID FOR ACQUIRING DIGITAL CERTIFICATE BY WRONGLY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) R.W. SEC. 194J OF THE ACT. 2 I.T.A. NO. 1316/KOL/2015 ASSESSMENT YEAR: 2012 -13 M/S. M.K. GUPTA & CO. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS. 6,27,881/- MADE BY THE A.O. ON ACCOUNT OF PAYMENT MADE TO M/S. TOPLINE BY WRONGLY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) R.W. SECTION 194A OF THE ACT. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 2,26,100/- MADE BY THE A.O. ON ACCOUNT OF PAYMENT MADE FOR DRILLING CHARGES BY WRONGLY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) R.W. SEC. 194C OF THE ACT. 5. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION TO THE TUNE OF RS. 1,39,595/- OUT OF THE TOTAL ADDITION OF RS. 2,79,190/- MADE BY THE A.O. IN RESPECT OF ALLEGED ACCRUAL OF FOREIGN J.V. PROFIT. 6. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE ESTIMATED DISALLOWANCE OF RS. 2,19,299/- MADE BY THE A.O. ON ACCOUNT OF CONSUMABLE KEROSENE OIL EXPENSES. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AT THE TIME OF HEARING BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE IS NOT PRESSED GROUND NO 1 AND 5 RAISED BY THE ASSESSEE IN THIS APPEAL. THE SAME ARE ACCORDINGLY DISMISSED AS NOT PRESSED. AS REGARDS THE ISSUES RAISED IN GROUND NO 2 TO 4 RELATING TO THE VARIOUS DISALLOWANCES MADE BY THE A.O. UNDER SECTION 40(A)(IA) AND CONFIRMED BY THE LD. CIT (A), THE LIMITED CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT AMOUNTS IN QUESTION DISALLOWED UNDER SECTION 40(A)(IA) HAVING BEEN ALREADY OFFERED TO TAX BY THE CONCERNED PAYEE, THE ASSESSEE CANNOT BE TREATED AS ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TAX AT SOURCE FROM THE SAID PAYMENTS AND THERE IS NO QUESTION OF MAKING DISALLOWANCE UNDER SECTION 40(A)(IA) AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS CIT 3 I.T.A. NO. 1316/KOL/2015 ASSESSMENT YEAR: 2012 -13 M/S. M.K. GUPTA & CO. REPORTED IN 293 ITR 226 (SC). HE HAS SUBMITTED THAT THE ASSESSING OFFICER MAY FOLLOW THIS CLAIM OF THE ASSESSEE. THE LEARNED DR HAS NOT PRESSED ANY OBJECTION IN THIS REGARD. WE ACCORDINGLY RESTORE THESE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF VERIFYING THE CLAIM OF THE ASSESSEE THAT THE CONCERNED PAYEES HAVE ALREADY PAID TAX ON THE AMOUNTS IN QUESTION PAID BY THE ASSESSEE AND ACCORDINGLY ALLOW APPROPRIATE RELIEF TO THE ASSESSEE KEEPING IN VIEW THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. (SUPRA). GROUND NO 2, 3 AND 4 OF THE ASSESSEES APPEAL ARE ACCORDINGLY TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 3. AS REGARDS THE ISSUE INVOLVED IN GROUND NO 6 RELATING TO THE DISALLOWANCE OF RS. 2,19,299/- MADE BY THE A.O. CONFIRMED BY THE LD. CIT (A) OUT OF CONSUMABLE KEROSENE OIL EXPENSES, IT IS OBSERVED THAT TOTAL EXPENSES OF RS. 43,85,970/- WERE CLAIMED BY THE ASSESSEE ON PURCHASE OF KEROSENE OIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O. EXAMINED THE CLAIM OF THE ASSESSEE FOR THE SAID EXPENSES AND FOUND THAT THE EXPENSES CLAIMED BY THE ASSESSEE ON PURCHASE OF KEROSENE OIL WERE SUPPORTED ONLY BY SELF-MADE VOUCHERS. ALTHOUGH HE FOUND MERIT IN THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE THAT THE CONSUMPTION OF KEROSENE OIL AT DIFFERENT SITES FOR THE WORK WAS INEVITABLE, HE HELD THAT THE EXPENSES CLAIMED BY THE ASSESSEE ON PURCHASE OF KEROSENE OIL WERE NOT FULLY VERIFIABLE FOR WANT OF PROPER BILLS AND VOUCHERS. HE ACCORDINGLY DISALLOWED EXPENSES CLAIMED BY THE ASSESSEE ON PURCHASE OF KEROSENE OIL TO THE EXTENT OF RS. 2,19,299/- BEING 5% OF THE TOTAL EXPENSES CLAIMED BY THE 4 I.T.A. NO. 1316/KOL/2015 ASSESSMENT YEAR: 2012 -13 M/S. M.K. GUPTA & CO. ASSESSEE ON PURCHASE OF KEROSENE. ON APPEAL, THE LD. CIT (A) CONFIRMED THE SAID DISALLOWANCE MADE BY THE A.O. AS THE ASSESSEE FAILED TO DISPUTE THE FINDINGS OF THE A.O. THAT THE EXPENSES CLAIMED ON PURCHASE OF OIL WERE NOT FULLY VERIFIABLE FOR WANT OF PROPER SUPPORTING BILLS AND VOUCHERS. 4. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT NO SPECIFIC INSTANCES HAVE BEEN POINTED OUT BY THE A.O. TO SHOW THE UNVERIFIABLE ELEMENT IN THE INSTANCES CLAIMED BY THE ASSESSEE ON PURCHASE OF KEROSENE OIL. HE HAS ALSO CONTENDED THAT THE KEROSENE OIL IS GENERALLY PURCHASE THROUGH UNORGANISED MARKET AND IT IS THEREFORE, NO ALWAYS POSSIBLE TO GET THE PROPER SUPPORTING BILLS OR VOUCHERS FOR THE SAME. IN OUR OPINION, THE CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE SELF CONTRADICTORY IN AS MUCH AS HE IS ALLEGING THE A.O. OF NOT HAVING POINTED OUT IN SPECIFIC INSTANCES TO SHOW THE UNVERIFIABLE ELEMENT IN THE EXPENSES INCURRED BY THE ASSESSEE ON PURCHASE OF KEROSENE OIL AND AT THE SAME TIME HE IS TRYING TO EXPLAIN THE REASONS FOR THE CLAIM OF THE ASSESSEE FOR PURCHASE OF KEROSENE OIL NOT BEING SUPPORTED BY PROPER BILLS AND VOUCHERS. AS RIGHTLY CONTENDED BY THE LEARNED DR THE ONUS WAS ON THE ASSESSEE TO SUPPORT AND SUBSTANTIATE HIS CLAIM FOR PURCHASE OF KEROSENE OIL BY PRODUCING THE RELEVANT DOCUMENTARY EVIDENCE IN THE FORM OF BILLS AND VOUCHERS AND HAVING FAILED TO DISCHARGE THE SAME WITHER BEFORE THE A.O. OR EVEN BEFORE THE LD. CIT (A), THE EXPENSES CLAIMED BY THE ASSESSEE ON PURCHASE OF OIL REMAINED UNVERIFIABLE JUSTIFYING THE DISALLOWANCE. MOREOVER THE DISALLOWANCE MADE FOR SUCH UNVERIFIABLE ELEMENT ONLY TO THE EXTENT OF 5% OF THE 5 I.T.A. NO. 1316/KOL/2015 ASSESSMENT YEAR: 2012 -13 M/S. M.K. GUPTA & CO. TOTAL EXPANSES CLAIMED BY THE ASSESSEE, IN OUR OPINION, IS QUITE FAIR AND REASONABLE. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT (A) CONFIRMING THE DISALLOWANCE MADE BY THE A.O. OUT OF EXPENSES CLAIMED BY THE ASSESSEE ON PURCHASE OF OIL AND UPHOLDING THE SAME. WE DISMISS GROUND NO 6 OF THE ASSESSEES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH NOVEMBER, 2017. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08/11/2017 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. M.K. GUPTA & CO., METRO HEIGHTS, 2 ND FLOOR, BEHIND NISSAN SHOWROOM, 2.5 MILE, SEVOKE ROAD, SILIGURI, WEST BENGAL 734001. 2. DCIT, CIR 2, AAYAKAR BHAWAN, PARIVAHAN NAGAR, MATIGHARA, SILIGURI, DARJEELING 734010. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA